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USPB Denies R-CALF’s Claim

U.S. Premium Beef (USPB) this week sent a letter to Ag Secretary Tom Vilsack requesting that USDA ignore information from R-CALF USA saying the company would not be affected by the proposed GIPSA competition rule.

U.S. Premium Beef (USPB) this week sent a letter to Ag Secretary Tom Vilsack requesting that USDA ignore information from R-CALF USA saying the company would not be affected by the proposed GIPSA competition rule.

According to R-CALF, it found that USPB would not be subject to provisions within the competition rule because USPB is not a packer, stockyard owner, market agency or dealer. Furthermore, USPB is neither on the USDA-GIPSA list of Bonded Packers in the U.S., nor is it on USDA-GIPSA lists of registered and bonded market agencies and dealers.

“Additionally, USPB markets its cattle to National Beef, a packer that would be subject to the provisions of the competition rule,” R-CALF says. “However, pursuant to the competition rule, National Beef can justify differential pricing and deviation from standard price or contract terms for USPB members based on: 1) payments to USPB members’ investment in USPB units (which give each member the right to deliver a specified number of cattle based on the number of units owned or leased) and 2) members’ ability to meet certain quality-based standards established by National Beef or USPB members.”

National Beef can also continue to pay premiums and apply discounts to cattle marketed by USPB members as long as National Beef provides reasons for the premiums paid and substantiates the revenue and cost justifications for such premiums and discounts, R-CALF said. The organization submitted its findings to GIPSA Administrator J. Dudly Butler and requested that GIPSA evaluate whether the group’s analysis is correct. To read R-CALF’s findings, go to www.r-calfusa.com/PremiumBeefAnalysis.pdf

However, in its letter to Vilsack, U.S. Premium Beef said R-CALF’s communication to GIPSA is an unsolicited request by a special interest group desiring USDA to determine whether or not USPB would be subject to the USDA’s proposed GIPSA rule.

“R-CALF’s conclusions regarding USPB are based on what ‘appears’ to be the facts about USPB, National Beef Packing Company, LLC (National Beef) (our subsidiary) and the proposed GIPSA rule,” said USPB CEO Steve Hunt. “No agency should respond based on what ‘appears’ to be the facts, especially when made by a third party organization such as R-CALF that does not have access to all of the facts and may have interests in conflict with those of USPB and its unit holders and associates.”

In a statement, USPB said it will thoroughly analyze how the proposed rule would impact it, its producers and consumer customers, and will reserve comments until it has completed its analysis. “If the USDA responds to R-CALF’s request regarding USPB, it is essentially declaring its enforcement intentions without being informed about the facts and circumstances that it, the USDA, wants to regulate or enforce,” Hunt said.